QE restart sees rapacious ECB guzzle covered bonds

By Bill Thornhill, Burhan Khadbai, Mike Turner

31 Oct 2019

The European Central Bank’s (ECB) overarching presence in the covered bond market was conspicuous this week but, with relative value waning and yields likely to fall, it may not prevent spread widening early next year. There was evidence of its hand too in the corporate bond market. Bill Thornhill, Burhan Khadbai and Mike Turner report.

The ECB posted orders equivalent to 40% of the deal size for covered bonds issued on Wednesday by BPCE and Deutsche Kreditbank, eight times as much as the 5% it had bought on covered bonds issued since January.